John Casella slams critics of his cheap Yellow Tail wine

John Casella, the man behind Australia’s second biggest wine exporter, has urged the wine industry to focus on innovation as he slammed critics who blame his winery’s Yellow Tail label for undermining premium wine sales abroad.

Casella Wines, founded by Mr Casella’s parents Filippo and Maria in 1969, has bottled its one billionth bottle of Yellow Tail and is embarking on a fresh shake-up of the wine market to tap new profit streams through the release of products such as a pre-mixed Sangria and sparkling sauvginon blanc. It is also preparing to enter the fast growing cider market with its beer joint venture partner Coca-Cola Amatil, through a new cider called Pressman.

Casella’s brightly coloured, kangaroo emblem Yellow Tail wine label is one of the nation’s biggest export success stories. It became America’s biggest selling wine and accounts for one in every two Australian wine bottles sold in the United States, where it retails for $US6.99 per bottle. With an initial forecast for 500,000 annual case sales, the brand sells 12 million annually, with 8.5 million cases sold in the US.

Cheap and cheerful

But the label has been blamed by some Australian winemakers for fuelling perceptions in the key US market that Australian wine was cheap and cheerful.

Industry body Wine Australia has urged winemakers to focus on developing and selling premium wines, to better compete against low cost producers in Chile and Argentina and cushion against the high Australian dollar.

Mr Casella hit out at those who blame Yellow Tail’s success for hurting premium wine exports.

“People buying a $15 product don’t buy Yellow Tail,” Mr Casella said. “People buying Yellow Tail don’t buy $15 products. We are supplying one end of the market that has one type of consumer. If they are chasing consumers at the other end of the market it has nothing to do with us.” He cited the popularity of US label Barefoot which overtook Yellow Tail as America’s biggest selling wine last financial year. It is $US1 cheaper than a bottle of Yellow Tail.

“Does that mean Barefoot is destroying the image of American wine? They are all growing,” he said, noting domestic US wine sales were growing at about 6 per cent.

Chasing the next big Yellow Tail

Mr Casella said the wine industry needed to focus on innovating.

“We are running around looking at what other people are doing rather than truly innovating ourselves,” Mr Casella said.

“There’s a lot of innovation people could do. It just means focusing on the region you are in and what you can do best.” Mr Casella is aggressively chasing fresh innovation to find his next big Yellow Tail.

To help him find the next big thing, he recruited Darren Peck, a trained brewer from the United Kingdom, to head a “new product development” team about 18 months ago.

The result are the release of a pre-mix Sangria, which Mr Casella hopes can deliver new drinkers to the label, particularly the America’s hispanic population.

He anticipated selling 500,000 Sangria cases.

The product, which is designed to be drunk chilled or over ice, also allows Mr Casella to find new homes for warmer climate fruit, which have lost some appeal as winemakers shift to cooler climate premium wines.

Casella has also unveiled a new brand, Bondi, to lure drinkers from cider and ready-to-drink products.